Forecast: N.H. on track to hit pre-recession employment level in spring 2014
New Hampshire should recover the jobs it lost in the recession by sometime this spring, according to a new forecast. But for the first time in decades, the Granite State isn’t setting the pace for the region’s economic recovery.
“This is the first time in my memory that New Hampshire hasn’t grown faster than the rest of the New England states on average,” said Dennis Delay, economist at the New Hampshire Center for Public Policy Studies.
Delay is also a forecaster for the nonprofit New England Economic Partnership, and his report on New Hampshire was released last week as the group held its fall conference in Boston.
It predicts New Hampshire will reach its pre-recession peak employment level in spring 2014, making it the third state in New England to recover from the recession, behind Massachusetts and Vermont. The state economy is projected to see real growth of about 3 percent a year for the next five years.
For New England as a whole, the partnership predicts relatively slow economic growth, in tune with the rest of the United States.
During the recession, New Hampshire’s jobless rate never hit the levels seen at the national level. The state’s seasonally adjusted unemployment rate peaked at 6.7 percent from October 2009 through January 2010 and fell to 5 percent in August (numbers for September and October will be released Wednesday, according to New Hampshire Employment Security). The national unemployment rate stood at 7.3 percent in October, down from its October 2009 peak of 10 percent.
The state’s housing market has returned to normal, Delay wrote in his forecast, and employment in the private services sector is expected to grow by 2 percent a year going forward.
Jobs in the manufacturing sector – which account for 15 percent of the state’s gross domestic product – are expected to shrink by an average of 0.4 percent a year for the next five years, even as manufacturing output increases, Delay said.
“Manufacturing is stabilized, at least in terms of jobs, so that’s a good thing,” Delay said. “If you look at manufacturing in terms of the wages paid in that industry, it’s still the largest single sector of the economy” in New Hampshire.
He added, “We’ve seen a decline in terms of the number of jobs, but the jobs that are there are more productive than they were several years ago, and frankly are better paid than they were several years ago. So manufacturing’s not dead by any means.”
Delay said an issue identified by the New Hampshire Center for Public Policy Studies in a report last year, the lack of migration into New Hampshire in the wake of the recession, remains a drag on the state.
“What’s different about this economic recovery in New Hampshire (is), first of all, it’s slower than the rest of the New England states . . . particularly Massachusetts,” Delay said. “And second of all, it’s not being accompanied by significant migration into the state. . . . So that’s a very different pattern than we’ve seen in past economic expansions in the state.”
The new economic forecast comes on the heels of a center report last month that identified wide variation among economic indicators for New Hampshire. And the discussion about possible policy prescriptions will continue today, when the Business and Industry Association releases a state strategic economic plan.
Delay said the “bottom line is that New Hampshire’s reputation of being a low-cost, high-quality-of-life region relative to other parts of New England is still somewhat true, but I don’t think we can sit back and rely on that to be the same economic engine of growth that it used to be. . . . It’s not going to be enough to sit on our laurels.”
(Ben Leubsdorf can be reached at 369-3307 or email@example.com or on Twitter @BenLeubsdorf.)